BEIJING (MarketWatch) -- ArcelorMittal
MT, -0.12%
the world's largest steel maker, plans to set up a joint venture with Hunan Valin Steel Tube & Wire Co. (000932.SZ) to make steel used in auto production, to gain a stronger foothold in the fast growing China market, the Shenzhen-listed firm's controlling shareholder said Monday.

Valin Tube & Wire plans to take a 40% stake and Valin Iron & Steel the remaining 30%, said Li.

The deal still needs approval from the National Development and Reform Commission, China's economic planning agency, Li told reporters on the sidelines of a steel conference in Beijing.

He didn't disclose financial terms or other details related to the proposed deal.

Officials at ArcelorMittal's China office weren't immediately available for comment.

Li also said Valin Iron & Steel may cooperate with ArcelorMittal on overseas resources acquisitions, but has no plans to set up or acquire any steel factories outside China.

The group is also considering exploring overseas resources in regions such as Australia and Africa, Li said.

Mittal Steel Co., before its merger with Arcelor SA, spent $338 million to buy 36.67% of Valin Tube & Wire, becoming its second-largest shareholder, in 2005. It was the first time any foreign company had bought shares in a listed China state-owned steel company.

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